I am a Senior Political Contributor at Forbes and the official 'token lefty,' as the title of the page suggests. However, writing from the 'left of center' should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on "Forbes on Fox" on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows. I also serve as a Democratic strategist with Mercury Public Affairs.

What do you do when the Congressional Research Service, the completely non-partisan arm of the Library of Congress that has been advising Congress—and only Congress—on matters of policy and law for nearly a century, produces a research study that finds absolutely no correlation between the top tax rates and economic growth, thereby destroying a key tenet of conservative economic theory?

If you are a Republican member of the United States Senate, you do everything in your power to suppress that report—particularly when it comes less than two months before a national election where your candidate is selling this very economic theory as the basis for his candidacy.

Initially released on September 14, 2012, the study—authored by Thomas Hungerford who is a specialist in public finance at the C.R.S.—correlated the historical fluctuations of the highest income tax rates and tax rates on capital gains dating back to World War II with the economic growth (or lack of the same) that followed.

The conclusion?

Lowering the tax rates on the wealthy and top earners in America do not appear to have any impact on the nation’s economic growth.

“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

These three sentences do nothing less than blow apart the central tenet of modern conservative economic theory, confirming that lowering tax rates on the wealthy does nothing to grow the economy while doing a great deal to concentrate more wealth in the pockets of those at the very top of the income chain.

Not surprisingly, the results of the study caught the attention of a great many conservatives—so much so that, according to a New York Times piece, Republican’s in the United States Senate successfully pressured the Congressional Research Service to withdraw the report shortly after it was released. The withdrawal came over the objection of the CRS economic team and the author of the study.

The Times further reports that, according to Senate Minority Leader Mitch McConnell’s spokesperson, Senator McConnell—along with additional GOP senators— “raised concerns about the methodology and other flaws,” adding that additional people outside of Congress were also criticizing the study.

The nature of these alleged flaws?

That the report included terms such as “the Bush tax cuts” and references to “tax cuts for the rich.”

Added Antonia Ferrier, spokesperson for the Republican members of the Senate Finance Committee, “There were a lot of problems with the report from a real, legitimate economic analysis perspective. We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”

While a spokesperson for the C.R.S. refused to comment on the discussions between the Senate Republicans and her agency, she did confirm that the report was no longer in ‘official circulation’. However, the New York Times reports that a source requesting anonymity confirmed that the decision to pull the study was done against the advice of the economics division and that the author, Mr. Hungerford, stood by the report’s findings.

On Thursday, Senate Democrats republished the study following a letter sent to the C.R.S. by the ranking Democratic tax expert in the House, Rep. Sander Levin (D-MI), which reads, in part—

“I was deeply disturbed to hear that Mr. Hungerford’s report was taken down in response to political pressure from Congressional Republicans who had ideological objections to the report’s factual findings and conclusion. It would be completely inappropriate for CRS to censor one of its analysts simply because participants in the political process found his or her conclusion in conflict with their partisan position. I would like your explanation as to why this report was removed from the CRS website, who made that decision and what considerations led to it.”

For almost 100 years, the Congressional Research Service has worked to assist Congress by providing well-researched and accurate data to be utilized in the creation of important public policy. It has done so when Congress was controlled by Democrats and when Congress has been under the control of Republicans. No matter what party was in charge, the C.R.S. has always endeavored to keep politics out of their work in the effort to provide data that would inform and advance our public policy.

Apparently, solid, well researched data no longer matters—at least not when it comes to the Congressional Republicans.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

I’m okay with the CRS spending valuable time and resource to make official something half the country already realized. I’m not okay with the GOP’s success in making it unofficial. Fortunately, I believe the majority are wising up to TeaPolitics and will make that well known in upcoming congressional elections.

Having any significant effects on the economy of this country using tax policy or rates is a fantasy. There have no studies of substance that confirm that taxes affect economic performance. To affect out economy with tax or spending changes would require too large of a change.

We’ve been hearing that supply side bullshit since Laffer proposed it and Reagan popularized it. I’ve heard all the stuff about the Reagan tax changes fueling a 25 year period of growth in our economy. I seem to have missed some of it. Reagan’s tax changes included some rate change but the real economic boost from his tax changes was the part that eliminated most tax advantages for passive investments. That change resulted in billions flowing out of investments in real estate to other economic sectors where it became the basis for a lot of the investment in Silicon Valley.

8th paragraph of the NYT article states: republicans claims that the author was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies, and that his analysis had not taken into account other policies affecting growth, such as the Federal Reserve’s decisions on interest rates.

the fact is that the fed has taken an unprecedented step in keeping interest rates at 0% for a very long time, as well as making public statements saying they would keep the rate at 0 for the foreseeable future.

the fed is also in the process of completely changing the way the money multiplier is calculated (by removing the reserve requirement and putting in place a set % return on all reserves held by the bank. this is a massively chaotic effect and 1% investors know that the fed isn’t going to get it right immediately, and a basic tenant of banking is that uncertainty scares off investment (ask warren buffett).

the study goes on and on about tax impact on savings but COMPLETELY ignores interest rates that are acting in a completely new way!

this study also cites studies by Peter freaking Diamond (who makes it so republicans will automatically hate the study) as well as pro raising tax and pro welfare economists on the first page, while only citing counter arguments deep into the 4th page of the study.

face it, the reason this study didn’t raise any eyebrows when it was “suppressed” months ago was that the study made too broad of a claim with too narrow of reasoning behind it. I’m pretty hard on the fed so I find this study worthless without mentioning them, and the economist behind the study may not be strictly speaking partisan, but they definitely had an economic agenda to push. These facts combined make this study not worthy of having the CRS’s and congress’s name on it.

So, isn’t what you just did here precisely what the Congressional Republicans should have done? If you are a Member of the Senate or House and you disagree with a study then you make the case and let people decide. You do not suppress the study! While I don’t agree with many of your points, you have made a rational case and that’s fair. But how do you defend either party in Congress deciding what is and is not worthy of the CRS when it doesn’t suit their political purposes? That is just plain wrong. You know, full well, that had the study come out differently, and there were points that the Democrats took issue with, you would be screaming bloody murder if the Dems. had caused the CRS to suppress the report. This is not the way to do things and if you are smart enough to mount the challenge to the report you have mounted here in this comments section, then you are clearly smart enough to know that putting pressure on the non-partisan body to pull the report was the wrong thing to do-particiulary when the people who prepared the report stood behind it. I also find it curious that, now that the study has been republished by the Senate Democrats, I can find no effort by the GOP Senators to make a detailed case against it. Maybe you should get in touch with them as you are clearly more competent at doing so than they are.

to call what congress did to this study suppression would be like calling a rejection of a paper by a science journal suppression. the study is still out there for peer review, it just doesn’t have the backing of CRS or congress which IMO would add more respectability than i feel it deserves.

and don’t tempt me to get into politics rick, i enjoy engineering too much to get into that dodgy mess.

btw you are right about me fighting it if the dems rejected a study i liked >:-) but i doubt i’d call it suppression, they rejected a paper they felt was not deserving of their backing, nothing more.

Fair enough…and I wasn’t suggesting that you actually get into politics as you strike me as being much too smart for that! :-) By the way, very pleased to see you coming back here. Believe it or not, I like it when people who are smart disagree with me. It’s the loonies (from both sides) who say stupid things that make me nuts. I’m always up for someone who can argue their perspective intelligently. That is how readers, no matter what side they are on, learn a thing or two.